The REALTOR Code of Ethics in a Social Media...

The REALTOR® Code of Ethics

in a Social Media World

3 Hours of Continuing Education Credits

___________________________________________________________________________________

Class Information:

All cell phones, tablets and computers must be turned off during class.

No audio or video recording is allowed at any time.

Please be in your seat at the prescribed time.

You must attend all of the class to obtain credit for the course.

If you need to request a reprint of your certificate more than 30 days after the class has ended there will be a $10 fee.

Certificates will be emailed within 10 business days. RECP Instructors have full authority to refuse admittance or registration

Use this handout to follow along and take notes.

Module 1: 1.) Is Social Media in the Code of Ethics? 2.) The Preamble to the Code of Ethics 3.) Specific Posting Examples

Module 2: 1.) Friend or not? Protecting information 2.) Code of Ethics, review specific articles 3.) Case study interpretations 4.) General policies

Module 3: 1.) Professional Standards Process 2.) NAR Code of Ethics 3.) Arbitration & Mediation 4.) Case Study

The REALTOR® Code of Ethics in the Social Media World (3 CE Credits)

2 Real Estate Certification Program Copyright 2014 www.recp.org

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Module 1 Agenda: 1.) Is Social media in the Code of Ethics

2.) The Preamble to the Code of Ethics

3.) Specific Posting Examples

Who is doing social media?

Lots of people!

More mainstream

Promote yourself and your business

Use Social Media responsibly

Are you social?

Privacy

(TMI) Too Much Information

Sharing confidential information

“Friend” or “Un-Friend”

Safety issues

Post in haste, repent at leisure

Security Settings

What can strangers see?

Who can see your posts?

Review all security settings regularly

Could criminals use this data?

What bugs you?

Trivial comments

Games and game invites

People trying to access your personal information

Spam

False accounts



Social Media Behavior

sss



Module 2 Agenda: 1.) Friend or not? Protecting information

2.) Code of Ethics, review specific articles

3.) Case study interpretations

4.) General policies

Friend or not?

Should you accept a friend request from a competitor?

How should you respond

Online REALTOR® Groups

Question is posted

Active member replies with inaccurate information

What do you do?

Blog

A friend is active online and writes blogs regularly

Competitor has cut/pasted content without attribution

Copyright violation

Negative Posts on Your Page

A friend who is not in the industry posts something derogatory about their REALTOR®

on your Facebook page

What do you do?

Professional Designations

An officemate has earned several designations

He told you he quit paying his dues because of the expense

His advertising reference all of the designations

Is this a violation?

Business Ethics

License Law

Code of Ethics

Company policies

Individual moral values

Business ethics and legal standards



Structure of the Code of Ethics

Preamble

17 Articles

Standards of Practice

Only Articles may be violates

Standards of Practice

Support interpret and amplify each article

Ethics complaints may only cite a Standard of Practice in support of a violation

Article 1: Honesty

SOP 1-6

Official Case Interpretations

Fact situations for which each Article and/or Standard of Practice of the Code are

applied

May not be charged, but may be cited in support of an alleged violation

Quick Rundown of the Code of Ethics

Article 1: Honesty

Article 2: Misrepresentation

Article 3: Cooperation

Article 4: True position

Article 5: Present or contemplated interest

Article 6: Compensation with consent

Article 7: Compensation from two parties

Article 8: Escrow

Article 9: In writing

Article 10: Fair housing

Article 11: Competency

Article 12: True picture in advertising

Article 13: Do not practice law

Article 14: Cooperate with professional standards

Article 15: Do not lie about other REALTORS®

Article 16: Respect established relationships

Article 17: Arbitrate, do not litigate



Article 12

Truth and honesty in all real estate communications

Be honest and truthful

Present a “true picture” in advertising, marketing, etc.

Ensure that your status as a real estate professional is readily apparent in all

representations

No Blind Advertisements

Any display, classified advertising, signs, Internet advertising or business cards that carry

a broker’s name must contain the name of the broker company with whom the broker is

associated, and said broker company’s name must be clearly visible.

All advertising shall be under the direct supervision and in the name of the broker

company.

Article 16

Its central premise is that a REALTOR® shall not engage in any practice or take any action

which is inconsistent with the agency or other exclusive relationship that other

REALTORS® have with clients.

Standard of Practice 16-9

Requires REALTORS® to make reasonable efforts to determine whether the client is

subject to another current, valid, exclusive agreement prior to the REALTOR® entering

into an agency agreement or other exclusive relationship with the client.

Standard of Practice 16-13

Sets out the obligation not to deal with another REALTOR®’s client who is subject to an

exclusive agreement unless the client’s agent or broker gives consent or unless the

client initiates such dealings.

Things to Avoid in Blogs

Rants and tirades

Politics

Religion

Sex

Profanity

Libelous statement

Brokerage Policy

What does the Policy Manual require?

Who manages the company web and social media pages?

Does a blog need to be reviewed before posting?



Other Issues

“Failure to supervise”

Advertising

Communication with clients, customers and the general public

File and email organization

Ethical, lawful or not?

1. Listing agent forwards email with seller’s bottom line to buyer’s agent.

2. Cooperating agent emails all the emails from the ‘diva’ to a third party with

comments.

3. Broker says to agent: “Blind copy me and the attorney on all those emails.”

4. Buyer’s agent forward email with buyer’s top price to seller’s agent.

Policy & Procedure Manual

Privacy policy

Blogging policy

Individual website policy

Social media policy

Main company website

Module 3 Agenda: 1.) Professional Standards Process

2.) NAR Code of Ethics

3.) Arbitration & Mediation

4.) Case Study

IAR Shared Professional Standards Program

Function

o Handles cases for most local associations

o Began in January 2014

o 28* out of 32* local associations have opted in (*this number may change yearly)

Purpose

o Creates impartial and unbiased hearing panels

o To promote consistence, competency, and cost savings to local associations

Violations of the Code of Ethics

Anyone may file an ethics complaint

A complaint may allege a breach of duty owed to the client, owed to other REALTORS®,

and/or owed to the public

Complaints filed should not be frivolous or unsubstantiated



Filing a Charge

Charge must read as an alleged violation of one or more articles

SOP may only be cited in support of the charge

Preamble is aspirational only

Establishes obligations for which REALTORS® may be disciplined

Code of Ethics Article 1

The most charged article

Establishes the obligation to treat all parties honestly


The most violated article

Cooperation with other brokers


One of the most charged articles

Honesty and truthfulness in advertising and marketing

A Duty of REALTOR® Membership

Abide by the Code of Ethics of the National Association of REALTORS®

Abide by the bylaws of the association and its rules and regulations

Submit to arbitration disputes and to abide by the arbitrators award

Filing an Ethics Complaint

Must be filed within one hundred eighty (180) days from the time a complainant knew

that potentially unethical conduct took place

17 Articles and accompanying Standards of Practice

Complaint should include a narrative description of the circumstances

The complaint must cite one or more of the 17 Articles of the Code

Hearing panels decide if the articles were violated

Form #E-1: Must state a violation of an article not a standard of practice

Grievance Committee Process

Ethics Complaint

o Grievance Committee performs a review and screening function

o They do not conduct hearings

o Question: “If the allegations in the complaint were taken as true on their face, is it

possible that a violation of the code of ethics occurred?””

Arbitration Request

o Commission disputes, Contractual disputes

o Between REALTORS® associated with different firms



o Question: “If the allegations in the complaint were takenas true on their face, is the

matter at issue related to a real estate transaction and is it properly arbitral, i.e. is

there some basis on which an award could be based?”

A Grievance Committee May

Dismiss the complaint

Return the complaint to the complainant indication that the matter should be arbitrated

Send the complaint on to a Hearing Panel of the Professional Standards Committee

Representation at a Hearing

Represented by legal counsel or by a REALTOR®

The term ‘Counsel’ refers to an attorney or a REALTOR®

Only a licensed attorney may act as counsel in an arbitration proceeding

Role of Counsel: opening/closing statements, examining/cross-examining witnesses,

introducing affidavits, documents and other evidence

Attendance: the parties’ and the parties’ counsel and/or witnesses, the REALTORS®

Managing Broker

Discipline

Letter of warning

Letter of reprimand

Education

Fine not to exceed $15,000

Probation for one year or less

Severe Discipline

Suspension from board membership for not less than 30 days nor more than one year, or a fine of $5,000 in lieu of suspension

Expulsion from board membership for one to three years

Suspension or termination of MLS privileges

One Final Word

Many ethics complaints result from misunderstanding or a failure in communication

Before filing an ethics complaint, make reasonable efforts to communicate with your

real estate professional or managing broker in the broker company.

If these efforts are not fruitful, the local association of REALTORS® can give you the

procedures and forms necessary to file an ethics complaint.

Standard of Proof

Arbitration process: Preponderance of the evidence – more likely than unlikely

Ethics process: Clear, strong and convincing evidence that an ethical violation occurred

Arbitration Requests

REALTORS® must arbitrate contractual and specific non-contractual disputes, as defined

by SOP 17-4

Clients may invoke mandatory arbitration with their REALTORS® in accordance with

association regulations.



REALTORS® are obligated to cause their firm to arbitrate

Request and Agreement to Arbitrate Form

Arbitration Awards

The award of the Panel in an arbitration case can be judicially enforced if not paid by the

non-prevailing party

Payment of the awards are deposited (with IAR SPS if opted in), pending review of the

hearing process or during legal challenge

Procuring Cause – Who gets the commission?

There is no predetermined rule for entitlement

o No “contract” rule

o No “threshold” rule

Determinations are based on all facts and circumstances related to each particular

transaction

Basis For Award: Procuring Cause – A broker will be regarded as the “procuring cause”

of a sale… if his efforts are the foundation on which the negotiations resulting in a sale

are begun. (Black’s Law Dictionary, Fifth Edition)

Mediation

Disputing parties meet with a mediator

Create a mutually acceptable resolution

Mandatory mediation if opted into the state program

Mediation before arbitration

Mediation will be offered or mandated prior to arbitration

Parties can leave the mediation process at any time

Parties have complete control over the outcome

It is not an adversarial proceeding

Success rate is generally 90%, win-win

If a dispute is resolved in mediation, the parties sign an agreement spelling out the

terms of the settlement, and no arbitration hearing is held.

Gift of Vision

Familiarize yourself with all of the important articles in the Code of Ethics

Be clear and ethical in your real estate business

The Code is a gift of vision by the industry

Legal Hotline

The Legal Hotline is available to Managing Broker members and their designated agents

o Call: 800-444-5472

o Complete the online form



Thank you for attending the course!

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